This FAANG Stock Is Down 35%. Buying It Could Be a Genius Move

MotleyFool2022-10-04

This market is taking no prisoners. Whether you own shares of a newly public company or one of the world's most dominant technology enterprises like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), it's been ...

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Comments

Deonc
2022-10-04
Deonc
Dip
Chinleong
2022-10-04
Chinleong
Noted
cloudostrich
2022-10-04
cloudostrich
be greedy when others r fearful?
- Chinleong:
  Yes
blessed_1
2022-10-04
blessed_1
Ok
Funboy
2022-10-04
Funboy
Broken stock, not broken company... that's true.
- Shininglight:
  ok
Mich77
2022-10-04
Mich77
read
- Mich77:
  k
- Mich77:
  k
- Mich77:
  k
- Mich77:
  k
- Mich77:
  k

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Buying It Could Be a Genius Move\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-10-04 13:54 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com.au/2022/10/04/this-faang-stock-is-down-35-buying-it-could-be-a-genius-move-usfeed/><strong>MotleyFool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>This market is taking no prisoners. 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The Federal Open Markets Committee (FOMC), which sets the federal funds rate, the benchmark interest rate that determines what the rest of the economy can borrow at, is rapidly increasing rates to combat high inflation.U.S. Inflation Rate data by YChartsThis affects the economy. You may notice that mortgage rates at your local bank have soared. Companies that borrow money must now pay higher interest on their loans. Rising rates make borrowing more expensive and reduce how much people and businesses spend. That lower economic activity means that advertising budgets are likely coming down. That pie piece that represents advertising spend may get smaller.Broken stock, not broken companyYou can see this play out in Alphabet's revenue growth over the past year, which has dramatically decelerated. Going from 40% growth year over year to 12% growth in four quarters seems like hitting the brakes pretty hard. But it's essential to understand the context behind this and ask: Is this because Alphabet isn't getting the eyeballs to charge for its ads, or is what companies spend on ads shrinking?GOOG Revenue (Quarterly YoY Growth) data by YChartsBased on the economic circumstances above, the pie is getting smaller. You can check advertising companies' landscapes and see similar growth collapses. Roku, for example, guided for 35% revenue growth for the entire 2022 year in the first quarter. But it completely withdrew its full-year revenue growth guidance just one quarter later due to economic concerns.On the other hand, Alphabet's top two platforms (Google and YouTube) remain top traffic getters. A report for August from Semrush named Google and YouTube as the two top sites on the internet, garnering more than 23 billion visits in August. Facebook.com was third at just 5.5 billion visits, which shows just how large the gap is between Alphabet and the rest of the field. Investors can be reasonably sure that Alphabet's ad revenue will recover once the economy improves because its websites remain the dominant internet destinations where brands prioritize their ad budgets.Enjoy the saleThe stock's decline remains a buying opportunity for long-term investors. Alphabet now trades at its lowest price-to-earnings (P/E) ratio in a decade and is well below its median P/E of 27. From a price-to-sales (P/S) standpoint, the stock has only been less expensive during the COVID-19 crash in 2020.GOOG PE Ratio data by YChartsSure, growth may slow temporarily in this cruddy economic environment. Still, Alphabet remains a dominant business with a fortress-like balance sheet that includes $125 billion in cash against just $12 billion in debt. 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greedy when others r fearful?","listText":"be greedy when others r fearful?","text":"be greedy when others r fearful?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9912402354","repostId":2272881971,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":104213292,"gmtCreate":1664870504820,"gmtModify":1664870507995,"authorId":3559098973692807,"author":{"id":3559098973692807,"idStr":"3559098973692807","authorId":3559098973692807,"name":"Chinleong","avatar":"https://static.tigerbbs.com/6dbcd389c42e41aa06c692b423858c4c","vip":1,"crmLevel":7,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9912402354,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Yes</span>","text":"<span class=\"s1\">Yes</span>","html":"<span 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stock, not broken company... that's true.","listText":"Broken stock, not broken company... that's true.","text":"Broken stock, not broken company... that's true.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9912572418","repostId":2272881971,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":104213259,"gmtCreate":1664870366508,"gmtModify":1664870369771,"authorId":3563607262597606,"author":{"id":3563607262597606,"idStr":"3563607262597606","authorId":3563607262597606,"name":"Shininglight","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9912572418,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"}],"langContent":"EN"},{"id":9912576582,"gmtCreate":1664865064346,"gmtModify":1676537521078,"author":{"id":"3581849551321020","authorId":"3581849551321020","name":"Mich77","avatar":"https://static.tigerbbs.com/e68e0beedd6e067e59c605653c639699","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581849551321020","authorIdStr":"3581849551321020"},"htmlText":"read","listText":"read","text":"read","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":17,"repostSize":0,"link":"https://ttm.financial/post/9912576582","repostId":2272881971,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":104212804,"gmtCreate":1664865224313,"gmtModify":1664865228173,"authorId":3581849551321020,"author":{"id":3581849551321020,"idStr":"3581849551321020","authorId":3581849551321020,"name":"Mich77","avatar":"https://static.tigerbbs.com/e68e0beedd6e067e59c605653c639699","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9912576582,"type":1,"supId":0,"prevId":0,"content":"<span 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